Amazon’s announcement that cities had a chance to pitch themselves for the company’s second North American headquarters drew a whopping 238 bids from cities across North America — cities as diverse as Fresno, California, and Stonecrest, Georgia (which offered to rename itself Amazon, Georgia if it snagged the HQ2).
Today, Amazon whittled that list of contenders from 238 down to 20 (you can see the full list here).
“It’s one of the biggest business sweepstakes in the last generation, and we were honored to be on that list,” Research Triangle Regional Partnership executive director Ryan Combs told VentureBeat in a phone interview. RTRP put together the bid on behalf of Raleigh, one of the 20 finalists.
“Amazon’s decision to place Newark on its short list of 20 municipalities to host its new headquarters is by itself a great victory for our city,” Newark Mayor Ras J. Baraka told VentureBeat in an emailed statement. “It means that world-class corporations and organizations like Amazon have recognized the success of our administration’s efforts to build a stronger city that welcomes business, is open to innovation, and at the cutting edge of technology and transportation.”
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But the new list of “finalists” doesn’t really give outsiders any more indication as to what kind of city Amazon will choose. The list of finalists are the cities that met Amazon’s original criteria in the first place — a metropolitan area with more than 1 million people, access to mass transit, and daily direct flights to Seattle, New York, San Francisco, and D.C.
There are some cities that don’t yet have access to the latter two requirements, but have made plans to add more transit options or more direct flights. (Pittsburgh, for example, added its first nonstop flight to Seattle in November.) But Amazon pretty much just eliminated the cities that were longshot bids to begin with.
What Amazon is left with is an HQ option in every region of the United States, with Toronto the sole representative from outside the U.S. The West Coast even has one representative — Los Angeles — when many West Coast cities were already considered a longshot for being too close to Amazon’s current headquarters of Seattle. Ten of the largest 20 metropolitan areas in the U.S. are represented on the list. (New York and Newark are nestled within the same metropolitan statistical area, as are Washington, D.C., Northern Virginia, and Montgomery County, Maryland.)
Plenty of incentives to go around
According to a map posted on the website of journalism nonprofit MuckRock, which has been trying to collect Amazon HQ2 bids from all 238 cities with Freedom of Information Act requests, only Boston has released its full bid publicly.
Other cities have disclosed parts of their bids, such as the city of Newark, which revealed some of the sites it proposed for HQ2, and made headlines in October when Mayor Baraka and then-Gov. Chris Christie revealed that together they would be offering a combined $7 billion in tax subsidies if the company chose Newark. A partial bid from Washington, D.C. released this week indicated that Amazon could receive reimbursements of $7,500 for every Amazon worker that moves to D.C., as well as $30,000 per new job that it fills with military veterans, if the company chooses that area.
However, among the cities that made it through the first round of cuts, many of their home states already offer generous incentive packages that can give their citizens some ideas as to how much Amazon might receive in tax breaks. Illinois, for example, offers a tax credit called EDGE that allows qualified companies to keep 100 percent of the state income tax generated by their employees for up to 10 years.
Cities may also be keeping their bids secret in order to tack on additional subsidies further along in the selection process. Boston — which didn’t offer Amazon any additional incentives beyond what was offered through existing state and city incentives — stated in its bid that it “looked forward to discussing this chapter in further detail with Amazon.”
“If Amazon is going to stage this auction in public, everyone’s offer should be public,” Good Jobs First executive director Greg LeRoy told VentureBeat in a phone interview, also suggesting that cities be cooperate with one another as Amazon continues its selection process. Good Jobs First is an organization that publicly tracks corporate subsidy packages, and has been a vocal critic of the Amazon HQ2 bidding process.
Upping the ante
In the coming months, Amazon said that it expects to “dive deeper into their proposals, request additional information, and evaluate the feasibility of a future partnership.”
RTRP’s Combs said that the organization hadn’t had time yet to discuss Raleigh’s next steps after today’s news. “We will continue to talk and collaborate with all of our regional partners, and the state … and my guess is that this will be the stage where incentives will start to be discussed.”
Michael Hicks, a professor of economics at Ball State University in Indiana, told VentureBeat that he expects there to be a lot of “amateur sleuthing” from some of the finalist cities.
“If I’m a municipal team in Raleigh, I’m going to spend a lot of time reading newspapers and calling people, trying to find out deal packages for all of these competing locations,” Hicks said.
Hicks added that he expects at this point in the process, state legislatures will likely discuss whether to pass additional incentive packages and what they would look like. Municipal governments will also likely start to woo Amazon with additional development plans, like a new bike trail to Amazon’s proposed campus or a new retail development near employee housing.
LeRoy voiced concerns that city leaders of the finalist cities might put pressure on citizens to do more to support Amazon as the selection process continues.
“I hope mayors don’t say ‘Let’s have everyone buy stuff at Amazon to show Jeff Bezos love as we hope to make the next cut,'” LeRoy said.
The next round of cuts — if there are any — will likely indicate which of the two remaining types of cities on the list Amazon will go with. Amazon may favor some of the larger metropolitan areas like Boston, Washington, D.C., and Chicago — areas that will have no problem attracting the requested 50,000 workers, but are also seeing increased traffic and housing prices that will likely only further be exacerbated by Amazon’s presence. Or the company may favor smaller, “under the radar” metropolitan areas with large research institutions, like Raleigh and Pittsburgh.
One challenge that the finalist cities will face is that many of the amenities they offer — top research universities, vibrant downtowns, highly educated and experienced workforce — all of the other cities on the list do as well.
“What’s going to sway this is: Is there a site that he can build a campus on and that is surrounded by neighborhoods that can absorb 30,00 people, that are college educated — and where they’re going to want to live,” Hicks said, adding that he views cities like Columbus, Raleigh, Austin, Dallas, and Pittsburgh as some of the top contenders. Meanwhile, Bloomberg reported in September that some Amazon executives already favored Boston.
The company confirmed in its press release that it expects to make a final decision by the end of 2018, so there’s a lot more that the finalist cities will likely be doing between now and then to woo Amazon.